While I agree that the ongoing Claims Direct story does little to enhance the already tarnished reputation of our industry (Insurance Times, August 16), I must question your description of the company as a legal expenses insurer.
It may seem pedantic to point out that the firm is not authorised to write any class of insurance, but it is this inaccurate description of its activities that has allowed the whole industry to be tarred with their brush.
Legal expenses insurance (LEI) has provided an affordable route to justice in this country for more than 25 years, whether before or after the event, It is clear LEI has an increasing and important part to play in offering people access to justice in the future.
The principles of insurance have been fundamental to this success and will continue to be so. We should think carefully before using the term “insurer” when referring to organisations that would seek to profit from our industry without the experience, authorisation and regulation that the word implies.
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Paul Jacobs
Marketing communications manager
DAS Legal Expenses Insurance Company
Bristol
On the level
Much has been written about the move by Norwich Union (NU) to create a more level playing field for the various distribution methods it adopts. However, the following will reflect the progress it have made.
I was recently invited to quote for the insurance of a Ferrari for a client who was last insured with NU. The quotation I obtained was for £2,320. The garage that was selling the car encouraged my client to obtain a quotation from a broker with whom they had a connection and for identical cover quoted £1,816 – a difference of £504.
Having discussed this with my business development manager, it was concluded that the other broker must have a scheme for the insurance of such cars and that they were unable to match the quote through my agency.
Come on Mr Snowball, where are these “level playing fields”? I can't see them.
Perhaps there are too many mountains still in the way that are blocking my vision.
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Frank Cottle
The Lansdown Brokerage
Bath
Stamp out mis-selling
May I let your readers into a little secret regarding NU Direct and the General Insurance Standards Council's (GISC) 14-day money-back guarantee?
As we all know, the GISC expects clients to have full information regarding cover prior to a commitment to purchase. However, has anyone tried asking NU Direct for a quote?
I have, on two occasions, and on neither was I asked whether I needed business use.
On the first, I asked if the policy included business use and was told no, but it could be added for an extra premium. The telesales person said NU Direct expected clients to specifically ask for business use if required.
And recently, my wife asked for a quote for my car, describing me as a self-employed insurance broker. The quote was given without a word of business use being mentioned. My wife was offered a £20 special discount if she signed up there and then.
I am tempted, and I think other brokers should also consider, to take up an NU Direct quote and then, when the covernote is received, claim the 14-day free cover. The only problem would be to make sure I was on holiday for that fortnight, to ensure I didn't use the vehicle for business purposes.
But on a serious note, it is this sort of poor advice that the GISC is looking to stamp out.
I suggest anyone who discovers “mistakes” should notify the GISC so it can prevent recurrance, whether it is that of an insurer, broker or any other seller of general business.
I have already sent a letter to both the GISC and, to be fair, to NU Direct, advising them of the mis-selling incidents.
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Ian K Mantel
Principal
Manor Insurance Services
Hastings
Listen to the experts
I note the insurance industry has given £1m extra funding to the Motor Research Centre at Thatcham. It is laudable that efforts are being made to cut the amount of injury sustained in road traffic accident shunt incidents, but I believe this investment is made in hope rather than expectation, as far as the drive to cut whiplash personal injury claims is concerned.
Medico-Legal Consultancy is involved in a long-term study of the reported outcome of cervical whiplash type injuries in litigation and non-litigation groups. The results of this are yet to be published. However, provisional indications suggest such a large disparity between the reported outcomes in each group that I fear alteration in the design of seats will do little to help the explosion in the cost of whiplash claims projected by insurers.
It is our experience that a very significant number of claims go through “on the nod”, based on the provision of poor-quality, non-evidence-based medical reports, which frequently do not stand up to scrutiny when challenged by those medico-legal experts who insist on providing clear, evidence-based opinions.
While most insurers are aware of the benefits of high-quality medico-legal reports, there has been a noticeable trend of one or two insurers to challenge medical experts' fees, using the argument of the proportionality, leading to claimant solicitors asking their experts to reduce their fees in individual cases. The reality is that insurers should be grateful when a doctor gives a full and fearless opinion concerning the outcome of an injury. Such an opinion may drive down the overall cost of a settlement, but to further drive it down by refusing to pay reasonable medical fees is likely to be counter-productive in the long term. If experts are left wondering whether their fees are ever going to be paid, individuals may begin to select one end of a range of opinion concerning recovery from injury rather than another.
While such a stance could not be condoned, I have heard such opinions expressed. It seems likely that insurers could save themselves far more money by not unreasonably attacking experts' fees than might ever be saved by the laudable but, I fear, in the long term, unproductive, Thatcham initiative. Although some reduction in injury might be achieved, our research suggests this will have little effect on the level of claims.
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Dr RP Norwich
Managing director
Medico-Legal Consultancy
Gloucester
Salvaging reputations
In a recent Insurance Ombudsman's case, a Miss G wanted to keep the salvage of her total loss car, but the insurer refused and passed the car to salvage agents. Miss G subsequently learned her car had been repaired and an application made to re-register it.
The insurer said it was unwilling to allow policyholders to keep cars that were unroadworthy. It accepted it should have allowed Miss G to keep her car and offered £500 compensation for its error.
The ombudsman ruled that an insurer was not entitled to dispose of the salvage without the policyholder's express permission. The ombudsman also ruled that if a policyholder sought to retain and repair a car, the insurer should consider the request on the basis of the extent of repairs required.
So often I have encountered dominant insurers that not only remove the total loss car from the local area so it is not available for a local independent valuation but also fiercely refuse to allow the policyholder to retain the salvage of their treasured car or commercial vehicle.
Insurers need to more fully cooperate with a policyholder and also give clear written reasons and evidence if salvage cannot be retained by a policyholder who seeks the salvage.
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M P Ward FCII
Cumbria Insurance Brokers
Carlisle
Correction
Alan Bavin of Sevenoaks, Kent, is not the managing director of the marine division of ARB International and did not write the letter published in Insurance Times on August 23. The letter was sent mischievously and in an attempt to discredit Mr Bavin. We apologise for any embarrassment caused to him.
